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Co-op close to China fresh milk deal

Norco wants to export fresh milk to China as part of a broader strategy to expand in Asia.

Kim Honan

A NSW-based dairy co-operative will send a trial batch of its fresh milk to China within the next fortnight.

Norco has been developing a market for its fresh milk in Asia for the last 12 months.

The co-operative, owned by farmers in northern NSW and southern Queensland, already exports ice cream products to Japan and North America.

Norco's chief executive officer, Brett Kelly, says this will be the second lot of milk it's sent to China to be tested.

"We're probably about 80 per cent there; in terms of everything that needs to be done on this side from farm, through processing, through to the port is all under control," he said.

"What we're working on now, the last part, is getting through all the quality assurance through customs and the bureaucracy that you need to have the milk accepted overseas."

He expects the co-operative to still send another one or trials after this one before a commercial batch is sent.

"The quality assurance from the Australian side takes about six days, the quality assurance on the China side is about six days, so that takes up to 12 days," he said.

"When you're looking at a life of around about 14 days it means it's taking all your time through quality assurance.

"So if we can get the credibility through China that they're comfortable with our quality assurance, we can cut that time down and that enables you to have the time to sell into the consumer market there."

At this stage Norco is only developing a market for its full cream fresh milk.

"When we are in a position where we can export in there, then you would obviously look at the demand that would be available and I'm sure there would be a far ranging variety of product that they'd be looking at," he said.

Mr Kelly says it's hard to determine the amount of milk it could potentially export to China.

"It's a huge market, there's a huge growing middle class, and there is a real desire for Australian product because of the quality and credibility," he said.

"We believe it's something that if we can start to trickle in through some of the potential partners, such as retail supermarkets and some are others that deal in the corporate market, so we're talking smaller volumes, but there is the potential that it could become a huge volume."